It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in EarthLink Holdings Corp. (NASDAQ:ELNK).
EarthLink Holdings Corp. (NASDAQ:ELNK) was in 23 hedge funds’ portfolios at the end of the third quarter of 2015. ELNK shareholders have witnessed an increase in hedge fund sentiment lately. There were 21 hedge funds in our database with ELNK positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Aceto Corporation (NASDAQ:ACET), Hanmi Financial Corp (NASDAQ:HAFC), and LHC Group, Inc. (NASDAQ:LHCG) to gather more data points.
Now, we’re going to review the recent action regarding EarthLink Holdings Corp. (NASDAQ:ELNK).
What have hedge funds been doing with EarthLink Holdings CorpEarthLink Holdings Corp(NASDAQ:ELNK)?
Heading into Q4, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jim Simons’s Renaissance Technologies has the biggest position in EarthLink Holdings Corp. (NASDAQ:ELNK), worth close to $57.5 million, accounting for 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is Royce & Associates, managed by Chuck Royce, which holds a $26.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise Joel Greenblatt’s Gotham Asset Management, Mario Gabelli’s GAMCO Investors and Robert B. Gillam’s McKinley Capital Management.